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Blackwater USA – Daily Brief 6/5/19

China

  • An estimated 180,000 people turned out for a candlelight vigil in Hong Kong to remember the protesters who died in Tiananmen Square 30 years ago, but there was little mention of the event in Beijing—save for heightened security at the site itself. One reason the turnout was so high in Hong Kong this year is that residents of the semiautonomous territory have recently worried more about Chinese restrictions on their freedom.
  • Separately, the U.S. government is selling 34 ScanEagle surveillance drones to allied governments in the South China Sea: Malaysia, Indonesia, the Philippines, and Vietnam. That’s sure to irk China.
  • In addition, the VOA says that Uighur activists have stepped up their efforts to lobby the U.S. Congress for a bill recognizing their repression by the Chinese state. It doesn’t seem like Congress has much appetite for an issue that doesn’t really affect American voters, though, so I don’t think it’ll go anywhere.
  • China also picked a new fight with the U.S. by warning its citizens against traveling there as tourists or students, on account of America’s frequent “shootings, robberies, and thefts”—not to mention the scary capitalist thoughts they might pick up there. Analysts interpreted the move as a challenge to the U.S. tourism and education sectors, in the context of a broader trade war.
  • I love charts, and CNBC had a great article with charts showing China’s evolution since Tiananmen: from a poor, repressed, isolated population; to a middle-income, still-repressed global power. It’s pasted below, but without an interactive graphic that you can only engage on the original page here.

Strategic Minerals

  • U.S. government agencies delivered some recommendations to ease regulations on mining for critical minerals, in response to Pres. Trump’s request to do so. Per AP, the recommendations include: “speeding up mine permitting, doing more research of possible mining in the oceans, reducing what the government called cumbersome environmental requirements, and weighing the need for critical minerals when it comes to consideration of mining some currently off-limit public lands.” Of course, all of this will take some time to come about. The full AP article is pasted below.

Sudan

  • New reports say that Monday’s violent crackdown on protesters in Khartoum was even worse than opposition groups had initially reported: as many as 60 protesters are now thought to have died Monday, though things have quieted down since then.
  • Soldiers reportedly further aggravated the situation yesterday by rampaging through a hospital that was treating wounded protesters, shooting and detaining a doctor, and forcing the hospital to evict the wounded.

Mozambique

  • IS claimed an attack on Mozambican security forces in Mocimboa, Mozambique, but local media and government officials haven’t confirmed there was actually an attack in the first place. Either way, it’s the first time IS has claimed an attack in Mozambique—though other jihadists have been terrorizing the Mocimboa district for years.

Mexico

  • The Hill reports that Pres. Trump is considering using an emergency declaration to impose the new tariffs he threatened on Mexico without needing approval from Congress—where even Republicans are a bit skeptical. That’s certainly the easiest way to do it, but Congress won’t be happy to be side-stepped.
  • Border guards killed an American man who failed to stop for inspection and started firing at them at the San Ysidro border crossing.

Cuba

  • The Trump administration ended an exemption that let Americans visit Cuba on cruise ships or recreational boats, which was one of the most common ways that U.S. citizens have legally visited Cuba in recent years.

Syria

  • The fighting in Idlib has really flared up lately, but Russia doesn’t want you to know it: Russia blocked the UNSC from issuing a statement expressing concern about a rise in violence in the province.
  • Pro-Assad militias—including some Hezbollah elements—are also reporting high rates of casualties in northern Hama near Idlib, which probably means things aren’t going well for the government’s army, either.

Iraq

  • Iraq has now finished the process of removing 12,000 concrete walls that had fortified Baghdad’s Green Zone, opening the area up to the public for the first time in 16 years.

Russia

  • The U.S. Senate unanimously passed the Defending Elections against Trolls From Enemy Regimes, or DETER, Act (sometimes it feels like they try too hard with these acronyms). DETER blocks individuals who have violated campaign finance laws or tried to interfere with U.S. elections from entering the U.S…though it’s probably all for show, since anybody convicted of a felony is already ineligible for most types of U.S. visa.

Venezuela

  • Pres. Maduro’s former spy chief started a rumor—perhaps true—that Maduro claims to be a devout Christian, but has actually spent hundreds of thousands of dollars in state funds on mystical Santeria sacrifice rituals in Cuba.

Brexit

  • In a statement during his UK visit, Pres. Trump encouraged the UK to leave the EU—even without a deal—and offered to work with the UK on a “phenomenal” trade deal, in which “everything will be on the table” if it did.

DRC

  • DRC registered its 2,000th Ebola case today. The pace of new reports is still rising—and now probably averages around 25+ per day—which means the outbreak is still getting worse.
  • Attacks on health workers have stymied containment efforts, and general insecurity in the region hasn’t helped. Yesterday, there was another ADF attack in Beni, in which 13 civilians were killed.

DRPK

  • Reports say that North Korea suspended its five-month epic Mass Games mega-event just a few days in, after Kim Jong Un wasn’t impressed by what he saw. It looks pretty impressive to me, but maybe he felt his image wasn’t big enough to match his ego:
A photograph taken by Koryo Tours from Tuesday's performance of North Korea's latest Mass Games, "The Land of the People."

US says national security demands easier mining rules (AP)

The Trump administration proposed smoothing the way Tuesday for more prospecting and mining of dozens of minerals, including on public lands and even in the oceans, calling them essential to the U.S. economy and security.

A Democratic lawmaker called the proposals a potential giveaway to mining industries.

President Donald Trump had asked for Tuesday’s federal agency recommendations in 2017. Trump says the U.S. must step up its mining of so-called critical minerals to lessen its need for imports. The proposals come at a time of trade tensions with China that some fear could hit U.S. imports of rare earths and other minerals used by U.S. tech firms and other industries, including defense firms.

The Interior Department has designated nearly three dozen minerals, such as uranium, tin, cobalt and potash, as critical minerals.

The administration is “dedicated to ensuring that we are never held hostage to foreign powers for the natural resources critical to our national security and economic growth,” Interior Secretary David Bernhardt said in a statement.

Bernhardt said the department would work “expeditiously” to put the strategy into effect “from streamlining the permitting process to locating domestic supplies of minerals.”

Recommendations include speeding up mine permitting, doing more research of possible mining in the oceans, reducing what the government called cumbersome environmental requirements, and weighing the need for critical minerals when it comes to consideration of mining some currently off-limit public lands.

“This administration has set shameful new records for industry giveaways, and this is one of the worst,” said House Natural Resources Committee Chairman Raul Grijalva, an Arizona Democrat, who said the proposals would further damage public lands.

“The Trump administration is handing over our most treasured places to multinational corporations with no interest in our economy or the livability of this country,” he said.

Four charts show how much China’s economy has changed in 30 years (CNBC)

The Chinese government doesn’t often talk about the Tiananmen crackdown that shook Beijing 30 years ago this week. When reporters ask about it, Beijing officials often divert the conversation to the economic boom China has experienced since 1989.

Several hundred or perhaps thousands of Chinese pro-democracy protesters were killed at Tiananmen Square in 1989, according to various independent estimates.They were attacked by Chinese troops — some of them deployed in columns of tanks.

People’s Liberation Army Senior Colonel Zhou Bo this week said there was “nothing wrong” with China’s crackdown on protests 30 years ago — and he cited the country’s economic prosperity since then as evidence of Beijing’s proper course.

“Look at China after this incident. China has prospered,” he told CNBC’s Sri Jegarajah in a wide-ranging interview. “China, the Chinese people’s living standards are much higher. And we did do the right thing. There’s nothing wrong with it.”

Zhou provided no evidence of a link between economic prosperity and the events of June 4, 1989. But setting aside the human cost of 1989, anyone who wants to understand the new, global assertiveness from Beijing would be well served to look at the economic changes Zhou mentioned.

Below are four charts that illustrate them.

Urban migration

In 30 years, China has morphed from having a primarily agrarian population to a nation of city dwellers. This has come about in tandem with the consolidation of a once diverse, small-farm agricultural tradition, and a boom in the number of migrants who have settled in the country’s economic centers.

China’s biggest cities

And those cities have seen their gross domestic products explode. Thirty years ago, Shenzhen was a small town. Today, it’s a technology hub and one of China’s most economically potent cities.

Source: Channel Wu

In 1989, the five biggest cities by gross domestic product were Shanghai, Beijing, Chongqing, Guangzhou and Tianjin, according to analysis by widely followed Chinese financial journalist Wu Xiaobo.

In 2017, Shanghai and Beijing remained first and second, but Shenzhen climbed into third place. In addition to favorable government policies, Shenzhen has benefited from its proximity to local factories and the financial center of Hong Kong. The city hosts Chinese technology giants including Huawei and Tencent.

Global trading partners

The United States and China are now more than a year into a trade war that has cost both economies and disrupted global commerce.

There are early signs that other nations — Vietnam, India, Chile, France and Germany, among others — are benefiting as importers in China and the United States try to sidestep tariffs by seeking out products from third countries.

But acquiring goods from new factories (and new farms) hardly makes a dent in the overall trade volume generated by the world’s two biggest economies. The interactive graphic below gives a detailed view of trade relationships over recent years for China and the United States. [see here for the original site with the interactive graphic]

Chinese tourists around the world

Selfie-taking Chinese tourists are a common site worldwide today. Three decades ago, in the immediate aftermath of Tiananmen Square, the coming boom in outbound travel was just a faint glint on the horizon.

The Hamburg, Germany-based China Outbound Tourism Research Institute, or COTRI, forecasts that 180 million Chinese will travel overseas in 2019. Back in 1991, the figure was 2.13 million.

In 1989, the country was already a decade into a landmark opening of its economy that political leaders launched at the end of 1978.

And while GDP was growing then, average Chinese were by no means wealthy. Strict controls on overseas travel, meanwhile, meant glimpses of Mount Fuji or the Statue of Liberty were still largely confined to books, magazines and TV shows.

‘Shunned by the global community’

Wolfgang Georg Arlt, COTRI’s director, said no reliable numbers are available for the years 1989 and 1990.

“But as China was shunned by the global community after Tiananmen in June 1989 — and, anyway, China had almost no hard currency reserves — the number of departures was clearly below two million, maybe even below one million,” he told CNBC in an email.

The United States and other countries imposed sanctions on China for the Tiananmen crackdown, and economic growth slumped from 11.2 percent in 1988 to 4.2 percent in 1989 and 3.9 percent in 1990.

But GDP growth rebounded to 9.3 percent in 1991, beginning a long run of annual expansions, sometimes in double digits. Those eventually sent China leapfrogging over the likes of Canada, Italy, Britain, France, Germany and Japan to become the world’s second-largest economy.

Only the United States remains bigger.

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